2 Answers
2

As Wikipedia points out, probably the best rule of thumb is "can you speak it as a single word?". For instance, Nato (Nay-to) and Unicef (You-Ni-Cef), but USA (You-Ess-Ay) and FBI (Eff-Bee-Aye). Another common rule seems to be that anything less than five letters (NATO, FBI) can be capitalized all the way through, but anything longer than that (Unicef, Unesco) shouldn't, just because it looks ugly as full caps, although you can use small caps to make that look less ugly.

Personally, I think you should go with whatever your target audience is expecting.

Part of the difference here is that "AIDS," the acronym for the disease, is in all caps to distinguish it from "aids" the word (as in "visual aids," "study aids," etc.).
In the case of "radar" and other examples mentioned, there's no other, pre-existing word for it to displace, so there's no potential for confusion when writing it in lower-case.